Following the banking crisis European regulators have been encouraging banks to issue CoCo bonds, which have a
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Following the banking crisis European regulators have been encouraging banks to issue CoCo bonds, which have a bail-in structure should it get into financial difficulty. For instance, if the bank’s capital goes below a pre-specified level – say, 5 per cent – then the debt converts into equity. Regulators hope this will help banks in stressed conditions, and contribute to financial stability. Do you think there are any disadvantages to CoCo bonds?
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Corporate Finance
ISBN: 9780077173630
3rd Edition
Authors: David Hillier, Stephen A. Ross, Randolph W. Westerfield, Bradford D. Jordan, Jeffrey F. Jaffe
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